Good afternoon, everyone. This is Iyad Ghulam on behalf of SNB Capital. I would like to welcome you to a conference call with SAL management regarding Q3 2026 earnings results of the company. With us on the call today, Mr. Omar Hariri, the CEO, Mr. Haydar Ucar, CFO, and Mr. Abdulwahab Zarah, Senior Director of Investor Relations. We will first listen to management feedback. Following this, we will open the floor to questions. SAL management, please begin with your feedback.
Thank you, Iyad. [Non-English content] and good afternoon, everyone. Thank you for joining us today for SAL's third quarter and nine months 2026 earnings call. Joining me on the call from SAL team, Omar Hariri, our Chief Executive Officer, and Haydar Ucar, our Chief Financial Officer. Before we begin, please take a moment and review the disclaimer on the screen. As you know, today's presentation may include forward-looking statements based on current expectations and subject to risk and uncertainties that could cause actual results to differ materially. Further details are available in the presentation material and in our investor relations website. You can check that. As of today's agenda, our CEO will begin by discussing the operating environment, our business performance, and the key developments during the quarter.
Haydar then will take us through the financial results, divisional performance, and capital deployment before we return back to discussions into the outlook and the priorities, and open the floor for your questions. With that, I will hand over to Mr. Omar Hariri to take us over the presentation. After him.
Thank you, Abdulwahab. [Non-English content] and good afternoon, everyone. Thank you for joining us today. Before turning to our record third quarter results, I would like to briefly address the recent regional development and how SAL is responding. As you are aware, the aviation and logistics sectors have faced a challenging operating environment this year, with escalations in October creating further disruption to airline schedules, airport operations, and cargo movements. Our immediate priorities have been to protect our people, maintain business continuity, and support our airline partner and customers. It is important to clarify that air cargo operations are differently from normal passenger travel, especially during periods of disruption like what we are in today. While travel demand can be lost when flights are canceled, air cargo are often delayed or redirected rather than fully canceled, particularly for essential goods and time-sensitive products.
This is where SAL nationwide presence and integrated logistics capability play an important role. One of our principal strengths in managing disruptions is the resilience and the flexibility of our operations and network. Cargo can often be redirected through alternative terminals, routes, and modes of transports. Our role to make those alternatives work using our presence across the kingdom's airport, road feeder services, and integrated logistics capabilities to keep goods moving whenever possible. We have demonstrated these capabilities during the aerial disruption in March when cargo was redirected from Riyadh to alternative gateways, including Jeddah and Dammam. We accommodated additional cargo volumes. More recently, we have been utilizing Riyadh Dry Port to support cargo movements arriving by road from other locations. At the same time, we are exploring further operational capacity at other locations, including, for example, Al Qassim and Al Ahsa.
These initiatives reflect our ability to adapt our operations, redistribute cargo flows, and deploy resources to ensure we continue serving our customers. Naturally, these mitigation measures require additional equipment, transportation resources, and manpower at certain locations, resulting in some temporary additional operating cost. However, our client relationship remains supported by long-term contracts, providing stability to underlying business despite short-term operational challenges. Importantly, this is not the first time SAL has navigated such challenges. This ability to adapt has been tested before during COVID, the Red Sea disruption in 2024, and the earlier March 2026 regional conflict. The wider logistics industry has to respond to changes in established transport routes and operating conditions. These experiences have reinforced the importance of network flexibility, close coordination, and effective contingency planning. Looking ahead, we are always prepared for the recovery.
As restriction ease and disruption supply chains recover, we expect cargo movements to normalize, potentially accompanied by a period of increased volumes as delayed shipments move throughout the network. We have observed some early signs of improvement in cargo movements, although it remains too early to assess. Our focus is on ensuring that our terminals and operation capabilities are ready to handle any potential increase in cargo volumes as conditions improve. The situation remains uncertain, and the extent of any operational or financial impact will depend on how events develop. We will continue to monitor conditions closely and communicate any material developments, if any, through the appropriate channels. With that context, let me turn into the third quarter's performance. Alhamdulillah, despite the challenging operating environment, this was another strong quarter for SAL. We delivered record quarterly revenue, achieved strong earning growth, and continued to advance our strategic priorities.
I would like to thank our teams for their dedication and commitment throughout the demanding period. Before discussing the results in detail, let me briefly highlight the progress we are making across our three business divisions. Starting with cargo handling. This remains our largest contributor and the foundation of our business. Our nationwide network, operational experience, and airline relationship continue to grow and support our growth. In September, we obtained the General Authority of Civil Aviation Economic License to provide air cargo Ground Handling service at AlUla International Airport. This expands our domestic footprint to 20 airports across the kingdom. We have also established our first international operation in Liège, Belgium, extending our cargo handling presence into Europe. Moving to SAL Logistics. We are expanding our freight forwarding, warehousing, contract logistics, and specialized services, while building a broader and more diversified customer base.
The business is now ramping up with a growing pipeline of opportunities and increasing operational scale. Scale is particularly important in logistics. As volume grow, we improve the utilization of our infrastructure and our resources. We expect to see the benefits reflected progressively in efficiency and profitability. We continue to invest in the capabilities needed to support this growth, with a focus on building a sustainable earnings contribution over time. Finally, with SAL Zones. SAL Zones is a major component of our long-term strategy, providing infrastructure to support our expanding logistics offering. Development is progressing well, with phase I site preparation completed and construction underway. Encouragingly, progress to date has been ahead of our initial schedule, while capital expenditure has been tracking slightly below our original budget expectations. We are also seeing significant interest from potential tenants and partners, providing encouraging early indications of demand.
Our focus is on maintaining this momentum, converting commercial interests into firm commitments, and continuing to deploy capital with discipline. We remain on track to begin generating revenue from 2028, inshallah. Together, these three divisions provide the key directions for SAL, a strong cargo Ground Handling business, a logistics operation building scale and diversification, and a zone platform supporting our longer-term growth. Now, turning to our operating environment during the third quarter of the year. July was relatively slower, reflecting the impact of earlier disruption, while activity recovered during August and September, supported by strong import flows and favorable cargo mix. All of these has contributed positively to our revenue performance and quality. At the same time, the airline operating environment remained dynamic. Our commercial and operational teams maintained close engagement with our partners to respond to these developments and adapt our services to changing requirements.
Although all of this, safety remained our first priority. Alhamdulillah, we recorded no safety or security incident across our domestic airports terminals during quarter three. We are encouraged by the recovery in activity while remaining attentive to the changes still taking place across the region. Looking ahead, while uncertainty remains elevated, periods like this also reinforce the importance of reliability. Our customers increasingly value our resilience, consistency, and strong execution, and we will continue to support them regardless of how market conditions evolve. Now, we turn to our third quarter performance. I am pleased to report that SAL delivered another record quarter, with consolidated revenue reaching SAR 579 million, representing an increase of 38% compared with the same period of last year. The domestic handling business was the main driver, supported by recovery cargo volumes, strong import activities, and more favorable mix, also with increased contribution of terminal handling services.
The result also include first two months of contributing from our newly acquired operation in Liège, following completion of the transaction at end of July. This is an important distinction when assessing our report performance, and Haydar can provide further details on the domestic and international contributions. Within logistics, commercial momentum is continuing, with revenue increasing by 27% year to date to SAR 210 million and SAR 76 million on Q3, with 53% year-on-year growth. While this reflects the progress we are making in expanding our customer base and service offering, profitability remains an area of focus as we continue to develop the business and improve operational efficiencies. Beyond our operating performance, we continue to execute our strategic investment program. We made further progress on SAL Zones, expanded our logistics capabilities, and completed our first international acquisition.
At the same time, the group maintains strong operating cash generation, supporting our investment priorities and financial flexibility. Overall, our third quarter performance reflects the strength of our core business and the progress we are making in developing a broader and more diversified logistics platform. We are encouraged by these results while remaining mindful of the operating uncertainties and the importance of maintaining discipline as we continue to grow. Q3 was an active quarter for us, with several commercial agreements, strategic partnerships, and operational milestones. As mentioned, one of the most significant developments was the completion of our acquisition of Aviapartner Liège in Belgium, marking our first international expansion in Ground Handling. We are also continuously strengthening our commercial relationships, including our new agreement with China's SF Airlines, while progressing partnerships aimed at expanding our logistics capabilities and supporting the development of the sector.
On the digital side, we continued enhancing our CargoGate platform and expanding its services offering to support greater operational efficiencies and improve the customer experience. These developments reflect our continued focus on strengthening our core operation while building the capabilities required to support our longer-term growth. With that, I will hand over to my colleague Haydar to take you through the financial results and the divisional performance in more details. Thank you.
Thank you, Omar. Good afternoon, everyone. As Abu Talal highlighted, SAL delivered another strong quarter with record revenues and solid earnings growth. I will begin with the group's quarterly and nine-month results, then explain the main operating drivers and our investment activity along the way. Starting with the overall performance. Next slide, please. We are pleased to report that our third quarter saw strong financial performance across the entire group. We delivered the highest quarterly revenue in the company's history. Third quarter revenues was SAR 579 million, a 38% increase year-on-year. EBIT rose 34% to reach SAR 252 million, and net profit increased by 28% to SAR 232 million. All three metrics improved from the second quarter as well, building on the recovery and activity we saw earlier in the year. For the first nine months, revenue reached SAR 1.5 billion, up 28%.
EBIT increased by 21%, reaching SAR 636 million, while net profit rose by 17%, reaching SAR 580 million. The nine-month demonstrates strength of our business across a period that included disruptions, recoveries, and continued investments. Let me now take you through the main factors behind these results. Looking more closely at the financial performance, there are a few important points worth highlighting. First, revenue growth of 38% outpaced the increase in consolidated cargo handling volumes, mainly driven by an improvement in the overall revenue mix, supported by stronger import activity, increased contribution from terminal handling, and pricing enhancements. It is important to recognize that our revenue performance is not driven by cargo volumes alone. The type of cargo we handle, the services required by our customers, and the overall activity across our terminals all contribute to the revenue we generate.
During the quarter, these factors supported stronger revenue growth and relative volumes. The results also include the contribution from the Liège acquisition from August and September, following the completion of the acquisition. Moving to profitability, EBIT increased by 34% to reach SAR 252 million. Our consolidated EBIT margin reached 43.5%, improving by 1.9 percentage points compared with the second quarter. On a year-on-year basis, the margin was slightly lower, partly reflecting the consolidation of the Liège branch and the growth of our Logistics business. While the group delivered strong earnings growth and sequential margin improvement, we continue to manage a broader operating portfolio with different margin profiles. The improvement in operating performance also supported net profit growth of 28%, reaching SAR 232 million, while our earnings per share increased to SAR 2.9 compared with SAR 2.26 in the same quarter last year.
Part of the improvement in operating earnings was offset by higher operating expenses associated with business expansion and short-term management of the assurances related to the supply chain disruptions. Overall, we are quite pleased with the performance delivered during the quarter, particularly the strength of the core handling business and the incremental improvement in profitability. At the same time, our focus remains on maintaining cost discipline and improving the earnings contribution of our growing businesses. On the divisional profitability, the performance during the quarter highlighted the different stages of development across our operating businesses. On the cargo Ground Handling, the division continued to deliver strong profitability, supported by the previously mentioned factors and the continued cost discipline. EBIT reached SAR 266 million, with the division's margin improving.
Turning to the Logistics, the division continued to deliver strong revenue growth, supported by commercial expansion, new customer relationships, and a broader range of service offerings. Profitability came under some pressure during the quarter due to the early termination of a facility in Dammam. The operating loss widened to SAR 11 million in total, with an EBIT margin of negative 14.4% in the quarter. This continues to reflect the ongoing investment in commercial capabilities and organizational resources required to support the division's expansions. While we are encouraged by the continued revenue growth in Logistics, improving profitability will be essential as we work towards developing a more diversified earnings base. I will discuss both divisions in greater details in the following slides. Now, turning to net working capital, we saw a clear improvement during the third quarter.
Net working capital stood at SAR 111 million at the end of September, compared with SAR 194 million at the end of June. This is a meaningful improvement, particularly considering the higher level of business activity that we had in the period and the record revenues that we achieved during the quarter. Net working capital as a percentage of revenue also improved compared with the previous quarters as a result. Our focus remains on receivables management and the efficient management of net working capital in general across our businesses. As SAL continues to expand, maintaining this discipline becomes increasingly important. It allows us to support high operating activity while preserving financial flexibility for our ongoing investment requirements. Let me now turn to our cash flow and liquidity position in more detail.
Operating cash flow increased by 10% year-on-year, contributing SAR 760 million, while adjusted free cash flow remained positive at SAR 337 million, despite higher capital expenditures in the period. This demonstrates continued cash generating capacity of the business alongside our strategic investment programs going hand in hand. Capital expenditures rose by SAR 208 million compared with SAR 103 million a year earlier. Including our time deposits invested, we ended September with almost SAR 2.4 billion in cash and cash equivalents. Alongside that liquidity, we still have not drawn down on the project finance facility for the SAL Zones project. That is approximately SAR 2.5 billion. That combined liquidity gives us flexibility in the coming period alongside our investment and growth programs. Our approach is to manage funding and capital deployment together. We are investing across cargo handling, logistics, digital capabilities, and SAL Zones. Next slide, please.
With that said, let me now move into the performance of our operating divisions. Let us start with Ground Handling. Ground Handling remains SAL's primary earnings contributor, delivering revenues of SAR 504 million in third quarter, up 34% year-on-year, while EBIT increased 43% to SAR 266 million, and EBIT margin ended at 52.9%. Next slide, please. Looking at the operating drivers behind these results, I will highlight three areas. First, stronger import activity and an improved cargo mix. We saw higher demand for air cargo handling services, particularly from import shipments, which generally contribute more favorable to our yields. This was accompanied by increased terminal handling activity as well. Second, commercial execution and operational resilience. Despite the evolving regional environment and changes in airline schedules and cargo rerouting, our teams continued adapting operations to maintain service continuity. Commercial activity also remained positive during this period.
Another important development was the initial consolidation of SAL International Ground Handling Belgium, formerly named Aviapartner Liège, which was acquired at the end of July. As the purchase price allocation process remained ongoing on September 30, the acquired business has been included in our financial results on a provisional basis, with final acquisition accounting expected to be completed during the fourth quarter. Third, our digital capabilities. We continued progress in our CargoGate platform and related digital initiatives, supporting improved cargo visibility, operational efficiency, and improved customer communications. Turning to volumes, consolidated tonnages reached 278 million kilograms in third quarter, up 18% year-on-year. Of this, 251 million kgs came from the Saudi operations, an increase of 6%, while Liège branch contributed 27 million kilograms for August and September. It is also worth highlighting that the third quarter 2025 consolidated revenue and volumes are excluding the international operations.
The international operations figures are included only for presentation purposes and obviously were not part of the consolidation the prior period. Again, I believe it is important to distinguish between these two contributions. Our domestic business continued to deliver positive underlying volume growth, while the consolidation of Liège added to the group's overall reported growth. For the first nine months, consolidated cargo volumes reached approximately 751 million kgs, representing growth of 8% compared to the same period of last year. Overall, the volume performance reflects the recovery in domestic cargo activity alongside the international contributions from our international expansion. Turning to the Logistics division. As we start, the division continued expanding its commercial activities and customer base during the quarter, supported by growth across freight forwarding, trucking, and contract logistics.
We are highly content to see the strong revenue contribution from the group and happy to announce that a good momentum has been created in the division. Let me now walk you through the financial performance. Logistics revenue increased 53% year-on-year to SAR 76 million in the third quarter. The operating losses widened to SAR 11 million, and EBIT margin was negative by 14.4%. Majority of the operating losses was accrued to early termination of our Dammam fulfillment operations, which due to underutilizations were no longer profitable. This will obviously create savings for the division on the upcoming periods. For the first nine months, revenues reached SAR 211 million, while the operating losses was SAR 26 million. The division is making very strong progress commercially, initiating long-term sustainable initiatives, while also setting profitability as a clear execution priority. Moving into the drivers and the actions behind those.
Looking at the operating developments within Logistics, there are three areas worth highlighting here. First, the commercial expansion. We have continued growing our activities across the different verticals, supported by new customer relationships and broader service offerings. During the quarter, we also expanded our participation in specialized logistics activities, including charter operations, complex cargo movements, and domestic and regional transportation services. These activities are helping diversify our revenue base and expand our capabilities across different logistics verticals. Second, profitability and operating efficiency. As mentioned earlier, the division continues to face profitability pressures associated with the push for gaining market share and the impact of deferrals of some key event logistics projects in the year. Our focus is on strengthening commercial execution and enhancing operating leverage as activity increases. We also continue to develop specialized warehousing and logistics capabilities to support a broader range of customer requirements.
Third, customer diversification and commercial momentum. We secured new customer relationships and expanded existing engagements across industrial, aviation, and specialized logistics sectors during the quarter, while at the same time, our business development pipeline continued to progress across warehousing, transportation, and integrated supply chain solutions. Overall, we remain encouraged by the division's commercial momentum. Next slide, please. Let me now turn to our capital allocations and deployment. Our investment programs is focused, as you know, on strengthening our existing terminal operations, expanding our Logistics infrastructure, and developing SAL Zones as a major long-term growth initiative for the group. The approach remains disciplined, with capital deployment aligned to project execution, commercial requirements, and expected returns. As previously communicated, our planned capital expenditures for the period until 2030 is approximately SAR 5.2 billion.
It's an investment and is allocated across our three main businesses, where approximately SAR 900 million is planned for Ground Handling, sar 203 million is planned for the Logistics division, and SAR 4.1 billion is planned for the SAL Zones division. Starting with Ground Handling, our investments are focused on expanding and modernizing cargo handling infrastructure across key domestic airports. Major projects include the expansion of our facilities in Jeddah and Riyadh, the refurbishment of our Dammam terminal, and the development of our new terminal in Medina. These investments are designed to increase handling capacity, improve operational efficiency, and support future growth in cargo activity. Within Logistics, our investment program is focused on expanding capabilities organically and inorganically. One of the key projects is the Jeddah Islamic Seaport Distribution Center, which will support our growing integrated logistics activities in the coming time.
Turning to the SAL Zones, development activities at the Malham Logistics Park continue progressing, as also mentioned by Bilal. Site preparation and earthworks have been completed, and construction activities for phase I are underway. We continue to progress the development in phases, with construction activities and CapEx deployments aligned to project milestones and commercial requirements. From a financial perspective, total committed CapEx currently has reached SAR 910 million as of September 2026. This reflects a continued progression on our investment program, with spending expected to develop alongside construction activity and project execution. We believe that this disciplined approach will allow us to continue progress in our long-term strategic investments while maintaining appropriate financial flexibility. With that, I will hand back to CEO to discuss the outlook, priorities, and to deliver the closing remarks.
Thank you, Haydar. As we approach the end of 2026, I would like to bring our discussion back to the broader business outlook and our priorities for the coming months. We have delivered strong results during the first nine months of the year while continuing to make progress across our strategic growth initiatives. At the same time, we recognize that the operating environment remains dynamic, particularly given ongoing regional development and their implications for aviation and logistics sectors. Our focus is therefore on maintaining operational resilience, executing our growth strategy with discipline, and preserving the financial flexibility needed to respond as conditions evolve. Let me briefly walk you through our priority guidance. Looking ahead, our strategic direction remains unchanged. However, we are taking a measured approach to the remainder of the year, particularly given the uncertainty surrounding regional developments. Against this backdrop, our priorities remain focused on four areas.
First, cargo Ground Handling. Our focus remains on maintaining service quality, strengthening commercial relationships, improving operational efficiency, and continuing to develop our service offering. We will also progress the integration of Liège operation following the completion of the acquisition. In light of the recent developments and uncertainty surrounding the remainder of the year, we have taken a more cautious view on cargo volumes and now anticipate broadly flat to slightly negative growth for 2026 compared to the earlier expectation of mid-single-digit growth. Second, on SAL Logistics. We remain encouraged by the commercial momentum and the continued expansion of our customer base. However, as Haydar highlighted, improving profitability remains a key priority. Our focus will be on asset utilization, strengthening commercial execution, and ensuring that revenue growth increasingly translates into better operating performance. Third, on SAL Zones, development continues progressing with construction activities underway.
We remain focused on the targeted completion of phase I by the end of 2027, supporting the planned commencement of revenue generation from 2028. At the same time, we recognize that the construction schedules and the timing of capital deployment may be affected by external developments, including potential supply chain disruptions. We will therefore continue monitoring progress closely and maintain flexibility in the sequencing of our investment where necessary. Commercial engagement with prospective tenants also remain an important priority as we progress the development. Finally, financial discipline and shareholder returns. Our strong operating cash generation and liquidity position continue to support our investment priorities. We remain committed to our long-term capital allocation strategy while ensuring the investment are aligned with projects' progress, operational requirements, and expected returns. At the same time, we remain committed to our dividend payout guideline.
And on that regard, our board has approved an ordinary dividend of SAR 173.6 million for the third quarter, equivalent to SAR 2.17 per share. Overall, while the external environment continues to present uncertainties, our priorities remain clear. We will continue to focus on operational resilience, commercial execution, financial discipline, and the delivery of our strategic growth initiatives. Before we conclude, I would like to leave you with a few key takeaways. First, we delivered another strong quarter, achieving record revenue and solid earnings growth, with cargo Ground Handling business continuing to demonstrate strong profitability while logistics maintained its growth momentum. At the same time, we made further progress on our strategic priorities, including the completion of our first international acquisition in Liège and ongoing development of SAL Zones.
Looking ahead, while we remain mindful of the evolving regional environment, our focus will always remain on our operational excellence and resilience, disciplined capital allocation, and executing our long-term growth strategy. We remain confident in the fundamentals of our business and the opportunities ahead. Finally, I appreciate that today's presentation has been a little bit longer than usual, but I thank you for your patience. Given the current situation, we felt it was very important to provide additional context and greater visibility into our business. With that, I will thank everyone for your continued interest and confidence in SAL, and we would now be happy to answer your questions. Thank you very much.
Thank you so much. Ladies and gentlemen, please, if you would like to ask any question, please raise your hand or type in the chat box. Our first question come from the line of Hikmat Salahia. Hikmat, please unmute locally and go ahead.
Hello, am I audible?
Yes, you are. Please go ahead.
Yes, thank you. Thank you, Iyad, for hosting the call. Thank you, management, for the presentation. Two questions from my side. The first one is regarding the volumes, domestic volumes. Basically, if I look at the numbers, nine months 2026 volumes compared to nine months 2025 grew around 4%. This also takes into consideration the diverted volumes given the regional events and trade routes. So I just want to understand how much do you believe going forward we can see underlying core volume growth, let's say, in 2027, and how much of the diverted volumes, let's call it, can SAL retain in 2027 on a normalized level? The second question is regarding the revenue per ton. Basically, we noticed that it is at record levels in Q3 2026. You also mentioned pricing enhancements and service mix and incremental services that you have done.
Can you quantify how much would be from a one-off, let's say, event from incremental services that you have done versus headline, let's say, tariff increases? In other words, is this a base yield that we can take forward in 2027? Thank you. That's all from my side.
Thank you, Hikmat. I'll take this question. In terms of the volume growth, 4%, and of course, the benefit of the diverted cargo was only confined to a few weeks in the beginning of the disruption in March. It wasn't a permanent thing that we took an advantage of. We focused more on the Saudi market, and the Saudi market remained resilient, and we've seen higher demand of volumes coming in by air. But for I will go to the next questions about the revenue per ton. Basically, it was impacted positively by the cargo mix. We've witnessed a 38% growth in imports versus a decrease of 19% in transit. And as we're all aware that import attracts higher yields and higher revenues, and it attracts also ancillary services to it. Thank you.
Okay, thank you.
The next question comes from the line of Reem Alkhulaifi. Reem, please unmute locally and go ahead.
Am I audible?
Yes, you are. Please go ahead.
Thank you, management, for the presentation, and congratulations on a strong set of results. I just have two questions from my side. The first one is domestic imports volume increased 38% year-on-year. Just wondering what drove this growth. Which product category contributed the most. The second one, the landside revenue benefited from increased demand for storage services during the period of terminal congestion. Could you quantify the contribution of the storage services to Q3 revenue and margin and clarify whether this represent a recurring revenue stream or a temporary congestion-related benefit. Thank you so much.
Thank you, Reem. The landside revenue is quite related to imports products or imports and exports volume. We've seen increase in imports basically because of the initial disruption in March with some of the GCC airlines. National carriers took charge in gaining more market share. Hence, we've seen more imports versus transit in this year. And we expect this to continue. As I said, lands, your second question, landside revenue is related to imports and its correlation. So when imports volumes increase, landside follows, and hence the increase in landside revenue. Thank you.
Thank you. Now we will take a question from the chat box. It's from Shafiq Abdelfattah. He's asking two questions. One about if there is any non-recurring gain or loss in Q3, whether it's related to the cost of closing the Dammam warehouse or the Liège deal. The second question is about, which is a little bit tough question, is about the impact of the regional war and conflict on volumes and margin in Q4. At least I know it's a tough question, but things are still not clear. But maybe if you just give us some color on how SAL is navigating through this in Q4.
Thank you. I'll start with the second question. I will leave the first question to my colleague Haydar. But as you rightly said, it's very unclear. We're living in uncertain times, but we've been through it. SAL has been through it in several occasions, in COVID as well in the 2024 disruption and earlier this year in March. As I said, volumes usually finds its way. It will take some time to reach to Saudi, but it will find its ways eventually. And usually during this disruption, post-disruption, we'll be seeing huge volume demand into the country. SAL has activated a lot of initiatives to accommodate cargoes. We're working in 20 airports, and also we've activated the Riyadh dry port in south of Riyadh as well as a clearance point as well.
We have done a lot of initiative to ensure that there is no disruption for essential supply chains into the kingdom. I will leave the first question to Haydar.
Thank you, Abu Talal. In terms of non-recurring gains or losses, to be honest, we did not have a lot of activities outside of the Dammam warehouse early termination closure, which was we found a very favorable deal to get out of that lease that would give us some savings in the coming future. That was the main element. Approximately SAR 7 million in the quarter is accrued to that. For the Liège deal, we had some special items for the transaction-related, closure-related items, but not much than what we had also in Q2. Related to the integration cost of the Liège deal, we will disclose that during Q4 so that we will get a little bit more hands-on both the synergies and the integration-related expenses related to that. But none of that is currently in there because we are still obviously trying to close the transaction.
Thank you for the question, Shafiq.
Thank you, Haydar. There is another question also in the chat box from Chandra Pereira, which is related to the current situation. He is asking how would reduced airport operations affect the business, and would it be able to mitigate the impact by arranging charter flights or more flights to alternative airports?
Thank you very much for these questions. As I said earlier, we have activated alternative airports. We are available in 20 airports in Saudi Arabia. We are seeing diversion of volumes into Jeddah, into Dammam, into Medina, into Hail, Qassim. We are operating in several airports. Also, the national carriers are gaining momentum. Saudia Cargo has increased their freighter fleets and chartering as well. There are significant initiatives in place to ensure that there is no any disruptions for supply chain and cargo flows into the kingdom.
Okay, thank you. The next question is from the line of Ankur Agrawal. Ankur, please unmute locally and go ahead.
I think three questions from my end. My first question is that I think when you say that you are looking at a flattish to declining volume for the full year for Saudi, I think we are looking at a meaningfully double-digit kind of volume decline in the fourth quarter. Is it conservative? I mean, is it too conservative? How should we think about the volume impact in the fourth quarter? Can you elaborate a bit further on that? How should we think about price per ton for the volume that you do push through or manage to push through in the fourth quarter? That is my first question. My second question is that there is a committed CapEx till September 2026 of SAR 900 million plus. There is an incurred CapEx of SAR 200 million. Can you explain how should we think about CapEx in Q4 and 2027 really?
That is my second question. The third question is, if I look at the international business volume, I know that it was not part of the mix last year, it has declined 10%. Is there a specific reason why it has declined? When you obviously decided to acquire this business, were you aware that the volume decline was factored in, or was it a surprise for you?
Thank you, Ankur. Abu Talal, do you want to start with the first question on the volume and the yields?
Yeah, I will start with the third question since it's fresh. In terms of Liège, we anticipated that, of course, Aviapartner was downsizing their cargo activities and focusing on passengers, and hence there was no focus on their cargo facilities in Liège in the past period. For us, we took this opportunity because we know that Liège has great potential. It's in the heart of Europe, and we, as experts in cargo, we can commercially drive it and ensure that we deliver value and growth. Of course, the Aviapartner strategy, they ended up with only one or two customers. We have a very big upside to turn it around and ensure that we have a great growth strategy in that market. As for the prices, we have long-term commitments with the airlines.
We were not anticipating any changes in the price, but maybe in the product mix and more high-yield products that will be coming our way in the future. Second-
Thank you, Abu Talal. Ankur, I'll jump into the second question about the CapEx deployment and the committed cash for the operations currently. 900 million is currently what we have committed across all of it, and we just want to make sure that we disclose that in full, because obviously in the CapEx, you'll see the cash outflow, and that's meaningful. But obviously, what we are tying in with the deal and the operational expansions and how we look at our projects, we just want to make sure that we also disclose those. We don't really have any expected delays around that in terms of how we will deploy that. The Q4 operations, just like we have seen across the previous quarters, is that we will ramp up on the capital outflows as part of our growth plan. Nothing has changed in that.
Ankur, I think that those are the questions that you had that both Abu Talal and I have combinedly answered on.
Yeah. Many thanks, Abu Talal, Haydar. I really appreciate it. Thank you.
Thank you. The next question is from Mohammed Saad. Mohammed, please unmute locally and go ahead.
Thank you, management. Am I audible?
Yes, you are.
Okay. I have a couple of questions. My first is about cargo volumes from Riyadh Airport being diverted, as you referred initially during the start of the presentation. Can you tell us what percentage of the Riyadh Airport's cargoes have been diverted to Qassim or Al Ahsa? That is my first question. My second question is, are you anticipating any form of support from GACA, whether in the terms of lower costs or some benefits in the wake of lost revenue? My third question is there a possibility of you speeding up your warehouses development at Jeddah Islamic Port and SAL Zones, given the significant demand that we are witnessing for warehousing in the Kingdom? These are my three questions.
Thank you, Mohammed. Of course, cargo is still operating in Riyadh today. We are receiving freighters in Riyadh, so it is under operations. Initially, there was some diversion into Jeddah and Dammam, and also the dry port, but it is operational in terms of cargo in Riyadh. In terms of the support from GACA, it is still early. GACA is in discussions with all the ecosystem. There are still initial discussions with them at this stage. As mentioned in our presentation, we are already ahead of schedule in SAL Zones and Malham. Also, we took the advantage and we expedited the constructions in Riyadh Airport, Jeddah, Dammam, and Medina, as well as the Jeddah Islamic Port. So they are going to be all ahead of schedule, inshallah.
Thank you.
Okay, the next question is coming from Kaushik Choudhary. Kaushik, please unmute locally and go ahead. Kaushik?
Good afternoon. Can you hear me? Am I audible?
Yes, you are. Good afternoon.
Okay. Thank you, management, so much for this opportunity. I have one question. You have a very aggressive CapEx plan. My question is on funding of the CapEx. I mean, is it possible for you to share some insight, some color in terms of how do you see the funding evolve from, let's say, 2027 till 2030? I mean, do you plan to take more debt, maybe lever up the balance sheet to some extent? How should we think about it in terms of, if you take more leverage, what sort of drawdown can we expect? If you can give us some color in terms of the funding of the CapEx plan. Thank you so much.
Yes, thank you. I think that I'll just quickly jump into this one. Indeed, we do have an aggressive CapEx plan, and we also have a very strong balance sheet that we spend a lot of time in terms of understanding how we would want to finance and fund these initiatives when we initially set off within this direction. In terms of the current funding, we've disclosed already that the current CapEx plan has already been more or less accounted for. We already have a SAB facility that we more or less have drawn the maximum out of, and then we have an SIDF facility for our current Ground Handling phase II. And then we most recently signed off another facility of project finance for the zone around SAR 2.5 billion. We haven't drawn down on that yet.
It will probably be at the end of 2027 or maybe early 2028, we'll start the initial drawdowns on that. And then we have a sukuk that we deployed in January of this year, ahead of the current pricing impacts and whatnot, so that was quite good for us. Initially, between 2027 and 2030, I think that all of our more or less leverage plans are in place. We do have a strong cash generation as well that can accommodate for certain things, but we have built in certain flexibility in terms of things that can come along the way. But I think we have a very solid plan in place in terms of how we want to leverage the company and how we want to maintain that funding.
Thank you. And if I may have a quick follow-up-
Kaushik Choudhary, if you allow me, just because we have a long queue and still we have only eight minutes. But please go ahead, but very quickly.
Sure. I think I just wanted to check one thing that you mentioned that you are committed to this CapEx plan, but unfortunately, with the geopolitical events continuing, which is kind of beyond anyone's control, is there a possibility of some of these plans being delayed to a few extent? If you can throw some light on that, your thoughts on that. Thank you so much.
I can make it very quickly. No, we don't have any change in our current deployment plan. We haven't seen anything that would trigger that yet. We still see a very strong demand for warehousing in the kingdom, and we still see a very strong demand for both cargo operations and everything that is related to that. So no, we don't really see that. But obviously, as things should pop up and things change, we will keep the investor community informed as usual.
Thank you very much.
Thank you. Ladies and gentlemen, as we are approaching the end of the call, kindly limit your question to one so we can accommodate the remaining questions. The next question is from Firas Al-Dihami. Firas, please unmute locally and go ahead.
Hi, everyone ...
Sorry, we cannot hear you, Firas.
Am I audible now?
Your voice is a bit far.
Okay. I'll start again. Congratulations on the results. I have a simple question regarding the G&A. I'd like to see if the G&A will be the new run rate since you acquired Aviapartner. The G&A went up 50% year-on-year and 28% Q-on-Q. Is SAR 88 million the new run rate for SAL or is this just because of the geopolitical tensions?
Okay, thank you. Obviously, the consolidation of another company with 220 employees had an impact on that as well. Part of it will be obviously our new run rate and our new structure in place, which will obviously also reflect in our profitability and our top lines as well. We also had the Dammam operations that had some impact, and there are minor other adjustments as well, but nothing that is that different from what you saw during Q2.
Clear. Could you give us an outlook for the G&A? Where should it evolve in the upcoming year?
Basically, this will be the new run rate with the current operations in place, but we're always assessing our costs. Obviously, there will be things temporarily in terms of how we are managing the current disruptions and making sure that we are there, but that also gives us other opportunities in place. We are extremely focused on making sure that we have a good base in terms of the G&A.
Clear. Thank you, management, for the opportunity to answer.
Thank you. The next question is from the line of Saleh Almuhayzi. Saleh, please unmute locally and go ahead.
Assalamu alaykum. This is Saleh Almuhayzi from Portfolios Investments. I have one question. Are you seeing more import cargo stay past the free grace period, so it becomes chargeable storage? What is driving that, and how much of the current rise in revenue per kg is coming from this chargeable storage rather than normal handling rates?
Thank you very much. We do not see a change in behavior, to be honest, in the way that customers are storing their cargoes in our facilities. The only change, as I said, is there is more import volumes rather than transit, and that is why we see a bit of difference in terminal charges and storage charges.
Thank you. The next question is from Abdulrahman Al-Salloum. Abdulrahman, please unmute locally and go ahead.
Hello, am I audible?
Yes, you are.
Thank you, Iyad. Thank you, management, for the presentation, and congrats for the great set of results. A question from my side regarding the King Khalid Airport. You have mentioned that it's get back to be operating, and I know that three out of the five terminals are currently operating, but the operating pace is a bit slower than pre-attack. Would you please clarify if you are fully operating, like before the attack levels, or what is the current situation in King Khalid Airport? Thank you so much.
Maybe I can give you information on cargo facilities. We are back in operations. The volumes has not yet reached to the pre-disruption levels. It will take some time to find its way, because airlines, they do scheduling basically on weekly basis and biweekly basis. It will take some time to reschedule. But the cargoes are coming. If it is not in Riyadh, it is coming in Jeddah or in Dammam or in Medina.
Thank you so much.
Thank you. The next question is from the line of Niranjan Kuldania. Niranjan, please go ahead.
Good afternoon, and thanks for taking our questions. Just a quick one from my side. Once again, this is regard to that surge in imports that we saw in the third quarter. Could you give us an idea as to what items sort of caused this big increase in import volumes? We were just wondering whether these are items that typically perhaps maybe come into sea freight that is now getting transferred to air freight. That is my question. Thank you.
I'm sorry, I didn't It wasn't clear, the voice at my end. Haydar, did you get the question?
Yes. Sorry, I got blocked a lot. So basically, the question relates to what kind of volumes and cargo are we now seeing in Q3 that is increasing the volumes, and if these are reoccurring or one time.
Yeah.
I thought, yeah, I think it's along the way that
Right.
Yeah. So basically, obviously, we see a very strong import demand, and in general across all cargo types. This is not something of somebody building up inventories and things in the short-term position. We are definitely seeing a lot of new supply chains being created towards Saudi Arabia, market shares taken from the local airlines, which is basically something that gives us a lot of comfort. So we don't see those as interim movements in volumes.
Maybe just the last question, we will just squeeze it in. Syed Akhtar, please go ahead. Unmute locally and go ahead. Syed?
Yes. Can you hear me?
Yes.
Yeah. First of all, thank you very much to the management, and congratulations on this outstanding performance. I have one question regarding the revenue distribution by region. How much of the revenue in third quarter and nine months of 2026 comes from Riyadh, and how much comes from Jeddah?
Well, let me quickly jump into that. We don't really disclose that kind of revenue distribution between our terminals. It is a meaningful portion, obviously, that Riyadh has. Riyadh is one of the more trafficked airports together with Jeddah as well. So those are our main hubs. Hello? Am I audible?
Yes. Yeah.
We do not really go into those details. I hope that this is enough for you.
Okay. Thank you.
Thank you so much. That was the last question in today's call. Ladies and gentlemen, if you have any more questions, you can send an email to the IR team in SAL, where your questions will be answered. By saying that, SNB Capital would like to thank SAL management for taking the time to conduct this call. We would like also to thank all participants for attending. We wish you a pleasant day. Thank you. This concludes today's call. You may now disconnect.
Thank you, guys.
Thank you, everyone. Thank you very much.